TUI AG has confirmed it will move into the Russian travel market, as a part of a new $60 million joint venture with billionaire Alexei Mordashov.

In partnership with Mr Mordashov’s S-Group, the German travel giant will establish 200 owned and franchised travel agencies in Russia and Ukraine over the next three years.

The venture will control up to ten per cent of the Russian travel market by 2013, according to TUI, with over twenty holiday destinations on offer.

Destinations on offer will include trips to Cyprus, a first for the Russian market.

“Today, Russia is one of the top growth markets for travel,” explained Michael Frenzel, TUI’s chief executive officer.

“Russian consumers are becoming more and more sophisticated and selective.”

TUI AG expects Russia to become Europe’s fourth-largest travel market by 2020, Mr Frenzel confirmed.

The partners each pledged to invest $20 million in the venture during 2009, with money spent on the acquisitions of assets from Russian tour operator VKO Group, Moscow-based Mostravel and Ukrainian travel company Voyage Kiev.

Further funds will now be committed to brand promotion and information technology, the partners confirmed in a joint statement. A TV advertising campaign is expected to begin “within weeks”.

“We see that our competitors are not so successful on the travel market and we see a lot of blank spots that we will try to fill in,” Vladimir Yakushev, managing partner of S-Group, told reporters in Russia.

“If there are opportunities for acquisitions, we surely will be considering those.”

Ten new look brochures for the Russian market have been published, while websites in Russia and the Ukraine have also gone live, a statement confirmed.